NZD/USD Forecast November 29, 2016, Technical Analysis

The NZD/USD pair rose during the day on Monday initially, but found the bottom of the previous uptrend line to be far too resistive to continue going higher. Because of this, it looks as if we are going to close with a shooting star like candle and of course suggests bearish pressure. That’s not a huge surprise, commodity markets continue to be difficult to traverse, and of course this previous support is resistive. I think the 0.70 level below is massively supportive, and if we can break down below there it would be a very negative sign. In fact, a move below that area should send this market to the 0.68 level below, and perhaps even lower than that.
Remember, the New Zealand dollar tends to be very sensitive to the overall health of commodity markets of course the risk appetite of traders around the world. The US dollar continues to be the strongest currency overall, and that of course will come into play when it comes to this market. If we did rally above the previous uptrend line, I think the market could go little bit farther from there but would be very choppy. It’s obviously the more difficult move as shown recently. Ultimately, this is a market that I think will continue to fall due to the fact that the US dollar is supported by what should be rising interest rates, and of course the New Zealand dollar is highly leveraged to Asia as well as the aforementioned commodity sector.
One thing I think you can count on is quite a bit of volatility, the Kiwi dollar does tend to be volatile in general, and of course this time year will start to see a siphoning off of liquidity. Because of this, we could see erratic moves but ultimately I still believe that the downward pressure should continue as the Federal Reserve is expected to raise interest rates in December, and possibly beyond that. New Zealand is nowhere near raising interest rates, so that of course should continue to give longer-term downward pressure.
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